The dividend will be in focus when the FTSE 100-listed insurer Aviva posts its interim results on Thursday, with some in the City forecasting a cut.
ING, which maintains a positive stance on the group (and which was not among those disappointed by the Aviva's decision to stick with last year's dividend) views a reduction as logical this time around.
"We believe the dividend cut we forecast [for the first half and the 2009 full year] will ultimately prove a simple decision for the Aviva board to take," the broker said in a preview note, pointing to the group's previous guidance on coverage. ING expects the interim dividend to be cut to 8.75p from 13.09p, and the full-year payout to be scaled back from 33p to 25p. Cazenove, meanwhile, expects management to signal a 33 per cent cut in the full-year dividend, from 33p to to 22p. Assuming a reversion to a 35-65 split between the interim and the final dividend, Cazenove's forecast implies a 7.7p payout for the first half of the year.
Today: Following a positive first-quarter update, the computer networking and IT specialist Telecity's first-half results are likely to be in line with management expectations and market consensus, according to UBS. "We are modelling revenues of £77m and [earnings] of £25m," the broker said. "Management is also likely to confirm its expectations for the full year, with a chance of guidance being increased".
Also today, Numis is predicting a "typically strong" performance from the software group Fidessa, which is due to post interim results. "We also look for management to reinstate guidance. This was pulled at the [full-year] results due to uncertainty in the end markets, but we believe visibility may be returning," Numis said.
Results/updates: Allocate Software, Fidessa, Hammerson, Intertek, Management Consulting, Ultra Electronics, Xchanging, Barclays, HSBC, Telecity.
Tomorrow: Results/updates: Cookson, Drax, Legal & General, Standard Chartered, Tullett Prebon, William Hill, Xstrata, Meggitt and Rotork.
Wednesday: The housebuilder Taylor Wimpey's interim results are expected to confirm more stable trends in the property sector, but even a steadying of the market should not detract from "weak economic fundamentals and increasing unemployment levels", according to Panmure Gordon's analysts. "In our view, the recent momentum seen in the housebuilding sector is not sustainable and we believe conditions will deteriorate over the coming weeks," the broker said. "Economic news remains weak, unemployment continues to rise and mortgage liquidity remains at historically low levels."
Evolution Securities anticipates an encouraging top-line performance when Premier Foods, owner of brands including Hovis bread and Branston pickle, posts its half-year results. "The company stated in a trading update in June that sales trends from the first four months of the year continued into May and June. Sales were up 3 per cent in the first four months but like-for-like sales (excluding the loss of a marginal bulk flour contract) were up 6 per cent," it said, adding that such trends should have persisted into the second quarter.
Also on Wednesday, WS Atkins is due to publish a trading statement. Given the relatively recent full year results release, UBS does not expect surprises. "Potentially the Middle East market may start to improve but we don't expect any material change in the UK position," the broker said.
Results/updates: Mondi, F&C Asset Management, Old Mutual, Lloyds, WS Atkins, Premier Foods, Taylor Wimpey.
Thursday: Deutsche Bank expects to hear of strong growth when Cobham posts interim results later this week, with the group benefiting from positive foreign exchange movements and acquisitions. "We expect management to be positive over outlook, with organic growth expected to accelerate in the second half of the year," the broker said.
Also on Thursday, Ladbrokes is due to publish half-year results. UBS is forecasting the bookmaker's earnings before interest and tax to be down by 8 per cent for the six months to 30 June, at £156.3m, with the interim dividend likely to be unchanged. UBS says the outlook for the second half is "relatively cautious due to the reliance on UK retail profits and the uncertainty of making the Italian operations profitable".
Results/updates: Fiberweb, Schroders, RSA Insurance, Ladbrokes, Cobham, Aviva.
Friday: Results/updates: Catlin, Logica, Royal Bank of Scotland.
Today: Manufacturing purchasing managers' index; US business confidence index.
Tomorrow: Eurozone producer prices; Spain unemployment; US home sales.
Wednesday: Nationwide consumer confidence index; Services purchasing managers index; manufacturing output for June.
Thursday: Bank of England MPC announcement; Japan leading indicators; Eurozone ECB announcement; US Weekly jobless claims.
Friday: Producer prices; Germany current account; US unemployment.Reuse content